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2014 (7) TMI 704 - AT - Service TaxAvailment of CENVAT Credit - Premises on which service is provided and credit is availed in its respect was not registered with the Department - Held that - unregistered premises ought to have registered with the jurisdictional Service Tax Officers as Input Service Distributor in terms of Rule 3 of the Service Tax (Registration of Special Category of Persons) Rules 2005 read with Rule 7 of the Cenvat Credit Rules, 2004 - service tax is not paid by the rented premises as Head Office for all the branches and no service tax registration is so taken by the appellant of such premises issuing credit taking document. In the facts and circumstances, appellant cannot take credit of the document issued by a premises not registered as an Input Service Distributor under the service tax provisions. Argument of the appellant that extended period is not applicable in this appeal will not help their case as nowhere it has been brought to the knowledge of the department that cenvat credit is being taken by the appellant on a document issued by the service recipient who is not registered as ISD under Rule 3 of the Service Tax (Registration of Special Category of Persons) Rules 2005 read with Rule 7 of the Cenvat Credit Rules, 2004 - Following decision of Mangalore Refinery and Petrochemicals vs. CCE Mangalore 2013 (9) TMI 326 - CESTAT BANGALORE - Decided against assessee.
Issues:
1. Denial of CENVAT Credit on input services used at unregistered premises. 2. Time bar for demand of service tax and imposition of penalty. 3. Defects in duty paying documents for denial of CENVAT Credit. Analysis: Issue 1: Denial of CENVAT Credit on input services used at unregistered premises The appellant, engaged in providing 'Stock Broker Service,' availed CENVAT Credit on service tax paid for hiring premises as a 'Document Retention Centre.' The Revenue contended that since the premises were unregistered and not used for output services, CENVAT Credit was inadmissible. The appellant argued that the denial was based on a minor procedural lapse and cited relevant case laws supporting their position. However, the Tribunal noted that unregistered premises should have been registered as 'Input Service Distributor,' as per statutory provisions. Citing a similar case, the Tribunal emphasized the importance of following ISD registration rules for distributing CENVAT credit, ultimately rejecting the appellant's appeal. Issue 2: Time bar for demand of service tax and imposition of penalty The appellant contended that the demand for service tax was time-barred as transactions were duly recorded, and there was no intent to evade tax. They argued that CENVAT credit was correctly reflected in their returns, and penalty under Section 78 of the Finance Act 1994 was unwarranted. However, the Tribunal did not find merit in this argument, as the denial of CENVAT Credit was based on the unregistered nature of the premises rather than suppression of facts. The Tribunal upheld the demand and penalty imposed by the lower authorities. Issue 3: Defects in duty paying documents for denial of CENVAT Credit The appellant raised the issue of defects in duty paying documents not being part of the Show Cause Notice, questioning the legality of denying CENVAT Credit on such grounds. However, the Tribunal did not find this argument persuasive, as the primary reason for denial was the lack of registration of the premises as an Input Service Distributor. The Tribunal emphasized the importance of adherence to registration rules under the Service Tax provisions, leading to the rejection of the appellant's appeal. In conclusion, the Tribunal upheld the denial of CENVAT Credit on input services used at unregistered premises, rejected the time bar argument for demand of service tax, and dismissed the challenge regarding defects in duty paying documents, emphasizing the significance of compliance with registration rules for availing CENVAT Credit.
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